The mortgage industry has surpassed more than 24 million workout plans for distressed borrowers since 2007 with the addition of the Q2 2015 totals, according to data released from HOPE NOW.
During that same eight-year period, the industry completed slightly more than six million foreclosures, about one-fourth the total of non-foreclosure solutions, according to HOPE NOW. For Q2, the number of workout solutions outpaced completed foreclosures by the count of 411,000 to 89,000, which calculates to an average of 4.6 solutions for every foreclosure sale during the quarter. The 89,000 completed foreclosures for Q2 represented a decline of 24 percent from the same quarter in 2014, when 117,000 foreclosures were completed.
About one-fourth of the 411,000 workout plans completed in Q2 were permanent loan modifications (113,000) that allowed borrowers to remain in their homes. Nearly 36,000 of those modifications were completed through the government's Home Affordable Mortgage Program (HAMP), and about 77,000 of them were proprietary loan mods, according to HOPE NOW. Mortgage servicers continue to look for other short-term options to avoid foreclosure when borrowers do not qualify for permanent loan modifications; about 24,000 of the non-foreclosure solutions in Q2 were short sales.
"Our data continues to show a consistent trend of non-foreclosure solutions outpacing completed foreclosure sales, which means that millions of families are receiving the help they need to avoid foreclosure," said Eric Selk, executive director of HOPE NOW. "The picture shows that more homeowners have been helped by the industry than have gone through a completed foreclosure. Completed foreclosures since 2007 are approximately 6.1 million compared to 24 million non-foreclosure solutions. Within the 24 million helped are some who fell out of previous solutions and were offered a secondary alternative by a mortgage servicer. This highlights the industry’s commitment to assisting families and contributing to the overall economic recovery from the foreclosure crisis. As the overall housing market improves each quarter, HOPE NOW is focusing its efforts on the markets that have been slower to recover."
Though the number of non-foreclosure solutions declined by 7 percent from 444,000 in Q1 down to 411,000 in Q2, the number of foreclosure starts also dropped quarter-over-quarter by 17 percent during that same period – from 212,000 in Q1 down to 176,000 in Q2.
To view HOPE NOW's complete data set, click here.